Duane Morris saw a 0.2 percent uptick in its revenue in 2013, while its profits per partner (PPP) and revenue per lawyer (RPL) remained nearly flat.
The firm’s gross revenue rose from $420.5 million in 2012 to $421.5 million in 2013.
While its net income dropped by 5 percent from $111 million in 2012 to $105.5 million in 2013, the firm’s equity partner tier decreased by 4.7 percent, from 127 lawyers to 121 lawyers, allowing the firm’s PPP to remain flat at about $875,000.
But Duane Morris Chairman and Chief Executive Officer John J. Soroko said there was actually a small bump in PPP last year that is not reflected in the way Legal affiliate The American Lawyer rounds the numbers.
In 2012, he said, the figure was rounded up to $875,000 and in 2013, it was rounded down to $875,000.
Without rounding, Soroko said, “our year was actually a little bit better but it’s very much the same story.”
The same could be said of the firm’s RPL, according to Soroko, which remained basically unchanged at $685,000 between 2012 and 2013 but was actually slightly up last year.
The firm’s overall headcount was flat at 613 attorneys and its nonequity partner tier increased by one lawyer, from 219 to 220.
Soroko attributed the drop in the equity partner tier to several partners reaching age 66 and being reclassified in the nonequity category.
Soroko also noted that Duane Morris beat its net income budget for the year, but acknowledged that the firm did incur significant expense in 2013 through lateral hires and the opening of new offices in Oman and Myanmar.
Soroko said the firm also effectively opened its Shanghai office, though the firm is still waiting on government approvals to officially open for business.
Still, Soroko refused to blame the net profit decrease on 2013 being an “investment year.”
“At Duane Morris, every year is an investment year,” he said. “If you’re not consistently investing, you’re not moving the firm forward in an optimal way.”
And the investments the firm made in 2013 have already begun to pay off, Soroko said.
For example, Soroko said, the firm’s intellectual property litigation practice was particularly busy in 2013, bolstered by the Silicon Valley office it opened last January in Palo Alto, Calif., with the addition of former K&L Gates IP litigation partner Karineh Khachatourian and associate Patrick S. Salceda.
Soroko said that while there hasn’t been much headcount growth in that office over the past year, it has given the firm a much needed physical presence in the Silicon Valley, where many of its clients in the electronics, telecommunications and electrical-engineering industries are located. Soroko said the office has also allowed the firm to bring on more of those types of clients over the past year.
Despite the steady business in the Silicon Valley office, Soroko said the firm has thus far resisted adding more lawyers.
According to Soroko, because the legal market in that region is already heavily saturated, many firms end up overstaffing their offices and finding they aren’t generating enough work to sustain the growth.
Soroko said he’d rather have a smaller number of lawyers who are consistently busy, adding that, when additional support is needed, the Silicon Valley office works closely with Duane Morris’ San Francisco office.
The firm did bolster its IP litigation practice in October with the additions of Woodcock Washburn partners Aleksander J. Goranin and David J. Wolfsohn to its Philadelphia office.
Soroko said the firm’s litigation and corporate transactional practices were also active in 2013.
According to Soroko, the firm’s overseas transactional practice was particularly busy last year.
Duane Morris & Selvam—the firm’s joint venture with Singapore firm Selvam—represented Heineken N.V. in its successful bid for a nearly 40 percent stake in Asia Pacific Breweries Ltd., a $4.6 billion transaction.
In addition, after Duane Morris & Selvam client Dentsu Inc. negotiated with the International Olympic Committee to get the broadcast rights for the Sochi Games, the 2014 summer Youth Olympic Games in Nanjing, China, and the 2016 summer Olympic Games in Rio de Janeiro, the firm helped the company find and contract with a broadcast partner in each of the 22 nations for which it won rights.
Soroko said the firm’s somewhat unorthodox approach to entering Asia’s legal market through places like Singapore, Myanmar and Oman has panned out.
Unlike many firms that attempt to open overseas and never get off the ground, Duane Morris’ offices in those countries are already active and “very highly regarded,” Soroko said.
Soroko said the firm will continue to look at expansion in foreign countries.
“We’re likely to see more opportunities for GDP growth in emerging markets” than domestically, Soroko said.
That said, Soroko did add that the firm is interested in growing in Texas, where it currently has a Houston office.
According to Soroko, the firm views the state “almost like it’s an economy unto itself,” with its thriving high tech, IP and energy industries.
Soroko said the firm is now looking at, “Are we there in the right numbers, with the right practices?”
Zack Needles can be contacted at 215-557-2493 or firstname.lastname@example.org. Follow him on Twitter @ZNeedlesTLI. •